Dear Members,
 
 The Directors have pleasure in presenting the Thirtieth Annual Report
 of your Company together with the Audited Statement of Accounts for the
 Financial Year ended 31st March 2011.
 
 Financial Results                                (Rs. in lacs)
 
 Particulars                                 2010-11    2009-10 
 
 Gross Income                               2798.00     12057.00
 
 Total expenditure                          2651.32     11810.45
 
 Profit/Loss before tax                       23.99       177.29
 
 Profit/Loss after tax                         3.42       152.27
 
 Dividend                                       Nil        Nil
 
 Paid up equity                             1202.00      1202.00
 
 Profit/Loss appropriated to General Reserve  -0.46        99.00
 
 Reserves (Including Capital Reserve)       9650.59      9651.26
 
 Net fixed assets                            597.81       650.33
 
 Capital employed                          10855.00     10856.00
 
 Earning/Loss per share (in Rs.)               0.03         1.27
 
 Cash earning/loss per share (in Rs.)          1.07         2.23
 
 Book value per share (in Rs.)                89.80        89.69
 
 Review of Operations
 
 During the year due to aggressive efforts, the company could improve
 sales of its own products i.e. Primary Drop/Insert Multiplexer as well
 as PLCC (Power Line Carrier Communication equipment). The company is
 also looking for tie ups with national and international companies to
 enhance its product line. Further due to aggressive marketing tie-ups,
 the company achieved a healthy turnover of approx. Rs.1814.40 Lacs in
 financial year 2010-11 besides income of Rs.968.53 Lacs from other
 activities.
 
 The book value of share held by you is around Rs.89.80/- per share and
 the Reserves stood at approx. Rs.96.51 Crores. The Company has invested
 an amount of Rs.23.49 lacs during the year in acquiring fixed assets. We
 are thankful for continuous support of our esteemed customers all
 through & also continuous support of shareholders, bankers and
 stakeholders, including the business associates as they reposed
 undoubting faith in the Company. Puncom offered value-added products
 and services to the customers on the basis of strategic and effective
 use of technology aided by aggressive market and product initiatives.
 
 Dividend
 
 Due to inappropriate profits in the current year, the Board of
 Directors of your Company has not recommended any dividend for the year
 2010-11.
 
 Change in Directorship
 
 During the financial year 2010-11, there has been no change in the
 Board of your company.
 
 Directors'' Responsibility Statement
 
 Pursuant to the requirement under section 217(2AA) of the Companies
 Act, 1956, with respect to Directors'' Responsibility Statement, it is
 hereby confirmed:
 
 i) That in the preparation of accounts for the financial year ended
 31st March, 2011, the applicable Accounting Standards have been
 followed along with proper explanation relating to material departures;
 
 ii) That the Directors have selected such accounting policies and
 applied them consistently and made judgment and estimates that were
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the company at the end of the financial year and of the
 profit or loss of the company for the year under review;
 
 iii) That the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provision of the Companies Act, 1956 for safeguarding the assets of the
 Company and for preventing and detecting fraud and other irregularity;
 
 iv) That the Directors have prepared the accounts for the financial
 year ended 31st March, 2011 on a going concern basis.
 
 Puncom''s Subsidiaries
 
 Your company has two subsidiaries namely M/s PCL Telecom Limited and
 M/s Punjab Digital Industrial Systems Limited. The former one is not in
 operations since 1997-98 and an application for winding-up was filed
 before the Hon''ble Punjab & Haryana High Court at Chandigarh. The Court
 on 20th October, 2005 has passed the order of its winding-up.
 Subsequently the Statement of Affairs has been filed with the Official
 Liquidator attached with the said Court. The Hon''ble Court is yet to
 issue the dissolution order.
 
 M/s Punjab Digital Industrial Systems Limited, the other subsidiary is
 also not in operation since long. Accordingly, a winding-up petition
 was filed with the Hon''ble Punjab & Haryana High Court at Chandigarh
 for winding-up of the company. The Court on 20th February, 2009 has
 passed the order of its winding-up. Subsequent to that, the Statement
 of Affairs has been filed with the Official Liquidator attached with
 the said Court. The records are being compiled for onward submission to
 the Official Liquidator office.
 
 Puncom''s shares on the Bourses
 
 The Shares of your Company are listed with The Stock Exchange, Mumbai
 (BSE) only. Presently about 95% of the company''s shares have been
 dematerialized. During the year under report, the share price of the
 company ranged between the low of Rs.44.50/- to the high of Rs.122.10/-.
 
 Corporate Plan/ Operations
 
 Puncom is making best efforts to increase its market share of its
 existing product range. While there is no appreciable change in the
 manufacturing trend of telecom equipment in India, yet Puncom has been
 able to hold its ground. The manufacturing activities have been
 supplemented by other value-added services like turnkey projects,
 annual maintenance contracts, trainings etc. The company has been able
 to perform well in the current competitive scenario and squeezing
 margins.
 
 Puncom is making good inroads in getting contracts for turn-key
 projects of V-Mux equipment from Railways. The company is not only
 focusing on indoor installation activities but has also collected
 orders for outdoor work linked to the indoor installations of V-Mux
 equipment. This would help in improving Puncom share in Railways with a
 wider scope of work. The company is offering this equipment to private
 parties/contractors who have collected orders from Railways for
 turn-key projects of V-Mux and associated items. This is also helping
 to increase the share of this equipment in Railways.
 
 Puncom has increased the market share of PLCC equipment by capturing
 new markets in more state electricity boards.  Puncom is also picking
 up orders for the turn-key projects of this product. The company has
 also explored the market of this product in private sector which is
 getting turn-key projects for sub-stations.
 
 Puncom has established a reasonably good market in Railways for its
 Power Plant despite very stiff competition from other vendors. The
 power plants are being offered as a part of turn-key solution to
 Railways alongwith V-Mux and also as stand alone against various
 tenders of Railways. This equipment is also being offered to private
 parties/contractors of Railways.
 
 The telecom markets in India have seen rapid changes in the recent
 years where the focus has been more on 2G and 3G networks and
 associated value added services than on landline and manufacturing.
 
 Puncom is making all possible efforts to make its presence felt in the
 areas of its strength i.e. manufacturing and is catering to some niche
 markets. The existing products viz, V-Mux, PLCC, Power Plant and spares
 of old products though are in the advanced stages of their product life
 cycles but yet are giving reasonably good turnovers. Efforts are being
 made to consolidate the position for these products in the existing
 markets and add new products for niche segments.
 
 Besides this, Puncom is active in value added services like turnkey
 projects, repair and maintenance. With the recent developments in the
 telecom sector regarding the security concerns of Indian Government,
 most of the telecom companies are making efforts to set up
 manufacturing bases in India to Indianise their operations. The Company
 is also making continuous efforts to add more new products to its kitty
 by way of techno-commercial tie-ups with a view to increasing the
 revenues.
 
 Puncom has recently introduced some new training programs and is
 formulating strategies to increase the strengths of students in this
 area of activity by pursuing aggressive marketing techniques.
 
 The Future
 
 - For several years now India has seen an exponential growth of telecom
 network in India leading to an increase in subscriber density to an
 impressive 52% and a sizeable broadband penetration. Liberal government
 policies and fierce competition between operators have ensured that
 India got latest and best equipments and technologies from largest
 equipment MNCs at lowest prices. Unfortunately, what is also now widely
 believed is that this technology upgrade, largely by-passed Indian
 telecom manufacturers, as majority of the equipment was simply imported
 fully finished into India and did not lead to policy mandated
 technology import which normally happens when imports of this magnitude
 are involved. Unable to compete against MNCs, most of the Indian
 telecom companies either resorted to trading of MNC equipment or
 shifted to project work and related new segments.  Lately, Government
 of India has become aware of the policy level mismatch and resultant
 security concerns of having a telecom network of mostly foreign origin
 and there is a talk of a new telecom policy with increased emphasis on
 local manufacturer.
 
 - Fortunately large scale upgrade of main telecom network and IT in
 general is also changing the work environment and catalysing other
 segments like power, railways, defence, government, security, education
 etc to upgrade their networks and work processes and are generating new
 business opportunities. New areas of network and information security,
 renewable energy, green and clean technologies, information access and
 automation etc are becoming increasingly important and emerging as new
 growth segments. Apart from this, defence with its unique domestic
 focus remains a major potential growth segment.
 
 - It is also expected that with the maturing of Indian telecom segment,
 and with suitable Government policy push, larger proportion of telecom
 equipment manufacture shall shift to India and will lead to increased
 share of indigenous equipments and higher contract manufacturing
 opportunities.
 
 - Historically, Puncom has been deriving its largest revenue from BSNL
 segment though Railway and Power have also been significant
 contributors. Unfolding telecom and industrial scenario however
 foresees increased role of new revenue streams from emerging growth
 segments. Puncom is monitoring these emerging trends and is on look out
 for appropriate opportunities for itself for sustenance and growth and
 preparing itself to meet the merging challenges in the changing
 environment.
 
 Managements Reply to Auditors Remarks
 
 M/s Raj Gupta & Co. Chartered Accountants, was appointed as Statutory
 Auditors of the Company for the year 2010- 2011. Notes on Accounts
 forming part of Annual accounts are self-explanatory and exhaustive to
 the remarks of Auditors in their report dated.
 
 i) As regards non-recognition of the accrued interest amounting to
 Rs.968.43 lacs (upto 12.07.2005 i.e date of deposit of
 
 Rs.735.63 lacs by UP Government) from UPCSMFL as per decree awarded by
 the court, we are of the opinion that there being contingency in
 realisation of interest in near future and as the execution of the same
 is pending before the lower court the same has not been recognized.
 Matter being sub-judice will be decided as per the legal procedure.
 The same has been in accordance with AS-9 on Revenue Recognition.
 [Refer Audit Report Para 4(vii)(a)]
 
 ii) As regards observation made by the Auditors regarding recognition
 of revenue on sales amounting to Rs.104.69 lacs which has not been in
 accordance with Accounting Standard (AS-9) issued by Institute of
 Chartered Accountants of India (ICAI), the same have been accounted for
 as per past practice. [Refer Audit Report Para 4(vii)(b)]
 
 iii) Regarding accounting of certain income and expenditure on cash
 basis, the same has been accounted for as per disclosures of Accounting
 Policy given in Schedule 22 of the accounts.  [(Refer Audit Report Para
 4(vii)(c)]
 
 iv) As regards excise duty demand including penalty and interest
 aggregating to Rs.251.67 lacs (net of pre-deposit) which is disputed, we
 are to inform that company has filed an appeal and the same is pending
 before the Central Excise Tribunal. [Refer Annexure to Audit Report
 Para 9(b)(i)]
 
 v) The excise and custom duty demand of Rs.30.20 lacs is disputed with
 the excise and custom department. In this, Puncom had submitted the
 reply/necessary documents but no further communications have been
 received till date [(Refer Annexure to Audit Report Para 9(b)(ii)]
 
 vi) As regards Sale Tax demand including interest aggregating to Rs.14.85
 Lacs (net of pre deposit), which is disputed, we are to inform that
 company has filled an appeal and the same is pending in the office of
 Commissioner Appeal, Commercial Taxes, Uttar Pradesh. [(Refer Annexure
 to Audit Report Para 9(b)(iii)]
 
 Variation in Increase/Decrease in stock is due to the final valuation
 of stock at the time of finalization of Accounts.  However, variation
 in Profit is due to increase in value of Closing Stock.
 
 There is a variation in Tax Expenses due to increase in provision of
 MAT which is due to increase in Profits and writing off of Deferred Tax
 Asset which was calculated/ provided by the Statutory Auditors at the
 time of finalization of Accounts.
 
 Companies (Disclosure of Particulars in the Report of the Board of
 Directors) Rules, 1988
 
 As required by the Companies (Disclosure of particulars in the report
 of the Board of Directors) Rules, 1988, the particulars in respect to
 Conservation of Energy, Research & Development & Foreign Exchange
 Earning and Outgo are as follows:
 
 A.  CONSERVATION OF ENERGY
 
 a) Energy conservation measures taken:
 
 We have continued with the practice of switching off the supply to the
 areas where the lights are not required or where the production work is
 not taking place.
 
 b) Additional Investments and Proposals if any being implemented for
 reduction of consumption of energy: No Investment and no proposals at
 present.
 
 c) Impact of measures at (a) & (b) above for reduction of energy
 consumption and consequent impact on the cost of production of goods:
 
 The consumption has reduced due to the above measures taken.
 
 d) Total energy consumption and energy consumption per unit of
 production is annexed at Form A and forms part of this report.
 
 B.  TECHNOLOGY ABSORPTION
 
 a) Efforts made in technology absorption are annexed herewith as Form B
 and forms part of this report.
 
 C.  FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 a) Activities relating to exports; initiatives taken to increase
 exports; development of new export markets for products and services
 and export plans: Nil
 
 b) Total Foreign Exchange Used and Earned is given as a part of Form B,
 which forms part of this report.  Further the company is planning to
 enter defence market under tie-up with a MNC/Foreign Company.
 
 Companies (Particulars of Employees) Rules, 1975
 
 As per Section 217(2A) of the Companies Act, 1956 read with the
 Companies (Particulars of Employees) Rules, 1975, the Company is
 required to give the list of employees who have been paid annual
 remuneration of Rs.24,00,000/- or above and a monthly remuneration of
 Rs.2,00,000/- and above in case the employee worked for less than a year.
 Since there is no employee drawing salary exceeding the limit, hence
 the same is not applicable.
 
 Industrial Relations
 
 The employee-employer relationship remained cordial and harmonious
 through out the year. The Board of Directors of your Company place on
 record their satisfaction for the dedicated services rendered by the
 employees of the company.
 
 Acknowledgement
 
 The Board places on record its gratitude to the BSNL, and Department of
 Railways, Ministry of Defence, VSNL, MTNL, PGCIL, PSEB and other
 esteemed customers in India and abroad, State Bank of India, Union Bank
 of India, IndusInd Bank & Allahabad Bank for their keen interest in the
 affairs of the company, continuous help and co-operation for successful
 working of the Company. The Board also places on record its gratitude
 to the Punjab Information Communications and Technology Corporation
 Limited (PICTCL), the Holding Company, for its guidance and support.
 
 The Board also places on record its appreciation for the dedication,
 commitment and hard work of staff at all levels. The Board in
 particular acknowledges the co-operation of esteemed shareholders for
 their constant support and for the confidence reposed in the Management
 of the Company.
 
 Place: S.A.S. Nagar (Mohali)                    (SARWAN SINGH CHANNY)
 
 Date   : November 02, 2011                                  CHAIRMAN